More takeover talk lends Metro Bank shares a lift
THESE days Metro Bank’s shares seem to be as easily moved by rumours and reports as they are by actual company news.
The embattled challenger lender ended the week on a high, with a sharp rise in shares seemingly triggered by a report in the Evening Standard that Lloyds
Bank is mulling a takeover. Lloyds (up 0.9pc, or 0.51p, to 57.31p) is the latest potential buyer suggested by the City rumour mill, joining the ranks of Royal Bank of Scotland and HSBC, which the City grapevine says is also keen.
It comes after founder and chairman Vernon Hill moved from an executive role into an ‘emeritus chairman’ position, in the fallout of a major accounting error that left a black hole in its books.
Metro shares are certainly at a bargain basement price. Despite rising 14.4pc, or 29.2p, to close at 232p last night, they have still shed 86pc in value so far this year.
Perhaps more of these rumours could be just the trick. Elsewhere, the boss of one of Britain’s biggest car dealerships stepped down after reporting a ‘disappointing’ slump in trading.
Lookers warned it expects profits to more than halve this year – just four months after it last issued a profit warning in July.
In a trading update, it said it had a more difficult third quarter than expected and predicts full-year profits will come in at £20m, far less than the £64m it made last year and below the City’s forecasts.
It comes as car companies around the world are grappling with stagnating sales, amid a dramatic fall in the popularity of polluting diesel vehicles.
Lookers boss Andy Bruce and operating chief Nigel McMinn agreed to step down after the update, which sent shares plunging by as much as 27pc.
They later clawed back most of the losses, finishing 1.8pc lower, down 0.9p, at 48.7p. Fellow carseller Auto Trader was dragged lower by Lookers’ gloomy announcement, sending shares falling 3.2pc, or 18p, to 544.2p.
Miner BHP rose 2.4pc, or 38.6p, to 1673.4p, after it said it will spend £34m on preparations to restart operations at its Samarco iron ore in mine in Brazil.
It comes after a tragedy at the mine in November 2015 when the wall of a dam holding waste material collapsed, spewing a torrent of toxic mud over local villages and killing 19.
The Anglo-Australian mining giant said it has been given the green light from local environmental authorities to start work on the site.
The money will go towards building a filtration plant, which it estimates will take a year to build, and it will then be able to reopen the mine. BHP owns 50pc of the joint venture, while Brazilian miner Vale owns the other half.
TP Icap, which negotiates deals in shares between big financial institutions, said its third quarter revenues were boosted by market turmoil that followed worries of a global recession and the undulations in the US-China trade spat.
Revenues rose 17pc to £478m, the company said in a trading update, sending shares 6.5pc higher, up 22.1p, to 365p.
Flares maker Chemring bagged a US defence contract and delivered a modest upgrade to profits, which it believes will come in slightly higher than expectations.
The deal sent shares shooting 2.2pc, or 4.5p, higher to 205.5p.
BBA Aviation closed 1.8pc, or 5.4p, higher at 309p after it said it would return £645m to shareholders following the £1.1bn disposal of its aerospace parts arm Ontic.
The FTSE 100 was mostly treading water but managed to rise 0.8pc, or 54.04 points, to finish at 7302.42. The FTSE 250 edged 0.7pc, or 137.27 points, higher to 20158.77.